P/E Ratio of the Hombuilders

Despite making huge profits, homebuilding stocks have been pummeled lately. Check out how low some of these P/E ratios are:

Ticker Company Name Market Cap (bil) P/E Ratio
DHI D R HORTON INC $7.51 4.77
PHM PULTE HOMES, INC. $7.13 4.74
LEN LENNAR CP CL A $7.03 5.07
CTX CENTEX CP $5.84 4.96
KBH KB HOME $4.17 4.42
TOL TOLL BROTHERS INC $4.08 5.15
NVR N V R L P $2.97 5.45
MDC M D C HOLDINGS $2.30 4.58
RYL RYLAND GROUP INC $2.01 4.55
BZH BEAZER HOMES USA INC $1.86 4.62
HOV HOVNANIAN ENT INC $1.79 4.09
SPF STANDARD PACIFIC LP $1.72 3.97
HXM DESARROLLADORA HOMEX $1.52 15.25
MTH MERITAGE HOMES CORP $1.23 4.26
BHS BROOKFIELD HOMES $0.87 4.45
TOA TECHNICAL OLYMPIC $0.81 3.33
WCI WCI COMMUNITIES INC $0.80 4.03
CHB CHAMPION ENTERPRISES $0.72 15.16

This is, of course, trailing earnings. The profits are going to be a little harder to come by next year, and the year after.
Homebuilding is the ultimate boom-and-bust industry–it’s all about timing. Don’t even think about buying a homebuilder until the last person has given up on the industry. Here’s how the sector has performed over the last three years:
Homebuilders.bmp

Posted by on June 20th, 2006 at 6:28 am


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